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The Levy Institute Measure of Economic Well-Being


  • Edward N. Wolff
  • Ajit Zacharias


Our measure of economic well-being is motivated by the conviction that there is substantial room for improving existing official measures of the level and distribution of household economic well-being. The definition of the scope of our measure is guided by an extended concept of income that fundamentally reflects the resources that a household can command for facilitating current consumption or acquiring financial and physical assets. In the contemporary United States, three main institutions--markets, the government, and the household--mediate such command. The measure therefore attempts to integrate the following components: money income, wealth, noncash transfers from the business and government sectors, some forms of public consumption, and household production. We discuss conceptual issues relevant to each of the components and outline an approach for combining them.

Suggested Citation

  • Edward N. Wolff & Ajit Zacharias, 2003. "The Levy Institute Measure of Economic Well-Being," Economics Working Paper Archive wp_372, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_372

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    References listed on IDEAS

    1. Munro, Alistair, 1992. "Self-Selection and Optimal In-Sind Transfers," Economic Journal, Royal Economic Society, vol. 102(414), pages 1184-1196, September.
    2. John Whalley, 1984. "Regression or Progression: The Taxing Question of Incidence Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 654-682, November.
    3. David E. Altig & Alan J. Auerbach & Laurence J. Kotlikoff & Kent Smetters & Jan Walliser, 1997. "Simulating U.S. tax reform," Working Paper 9712, Federal Reserve Bank of Cleveland.
    4. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-920, November.
    5. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226036335.
    6. Simon Kuznets & Lillian Epstein & Elizabeth Jenks, 1946. "National Income and Its Composition, 1919-1938, Volume II," NBER Books, National Bureau of Economic Research, Inc, number kuzn41-3, January.
    7. Lars Osberg & Andrew Sharpe, 2010. "The Index of Economic Well-Being," Challenge, Taylor & Francis Journals, vol. 53(4), pages 25-42.
    8. Harry F. Campbell, 1975. "An Input-Output Analysis of the Commodity Structure of Indirect Taxes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 8(3), pages 433-441, August.
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    Cited by:

    1. Thomas Masterson, 2011. "Quality of Match for Statistical Matches Used in the 1989 and 2000 LIMEW Estimates for France," Economics Working Paper Archive wp_676, Levy Economics Institute.
    2. Edward N. Wolff & Ajit Zacharias & Asena Caner, 2005. "Household wealth, public consumption and economic well-being in the United States," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 1073-1090, November.
    3. Edward N. Wolff & Ajit Zacharias & Thomas Masterson & Selcuk Eren & Andrew Sharpe & Elspeth Hazell, 2012. "A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being," Economics Working Paper Archive wp_703, Levy Economics Institute.
    4. Bonke, Jens, 2008. "Income distribution and financial satisfaction between spouses in Europe," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2291-2303, December.
    5. Edward Wolff & Ajit Zacharias, 2009. "Household wealth and the measurement of economic well-being in the United States," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(2), pages 83-115, June.
    6. Thomas Masterson, 2010. "Quality of Match for Statistical Matches Used in the 1999 and 2005 LIMEW Estimates for Canada," Economics Working Paper Archive wp_615, Levy Economics Institute.
    7. Thomas Masterson, 2010. "Quality of Match for Statistical Matches Used in the 1992 and 2007 LIMEW Estimates for the United States," Economics Working Paper Archive wp_618, Levy Economics Institute.
    8. Edward N. Wolff & Ajit Zacharias, 2007. "The Levy Institute Measure of Economic Well-Being United States, 1989-2001," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 443-470, Fall.
    9. Andrew Sharpe & Alexander Murray & Benjamin Evans & Elspeth Hazell, 2011. "The Levy Institute Measure of Economic Well-Being: Estimates for Canada, 1999 and 2005," CSLS Research Reports 2011-09, Centre for the Study of Living Standards.
    10. J. Bonke & M. Deding & M. Lausten, 2006. "Time and Money: Substitutes in Real Terms and Complements in Satisfactions," Economics Working Paper Archive wp_451, Levy Economics Institute.
    11. Andrew Sharpe & Jeremy Smith, 2005. "Measuring the Impact of Research on Well-being: A Survey of Indicators of Well-being," CSLS Research Reports 2005-02, Centre for the Study of Living Standards.
    12. Jens Bonke & Mette Deding & Mette Lausten, 2009. "Time and Money," Journal of Happiness Studies, Springer, vol. 10(2), pages 113-131, April.

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